FY 2017 audit update by Victorian Auditor-General's Office for FY17 - PowerPoint PPT Presentation

FinPro - Professional development seminar FY 2017 audit update by Victorian Auditor-General's Office

for FY17  Accounting – No changes!  Disclosures – AASB 124 application &model accounts changes(PP&E note).  Performance statement – Few changes. New in audit reporting space:  New format audit report & KAM’s.  2017 Audit snapshot

What auditors will be looking at this year?  Audit risks -PP&E balance. • Fair value assessment. • Found assets. • Capital work-in-progress. • Impairment risks from recent floods .  AASB 124 - compliance. Performance statement – LGPRF compliance.  And:  Entity specific audit risks (landfill provision, developer contributions, IT risk, revenue rec etc.,).

Overview of Councils common related parties: • Subsidiaries • Associates Entities • Joint ventures • Others • Key management personnel (“KMP”) • Close family Persons members of KMP’s • Controlled or jointly Other controlled by entities related persons (as above)

Related party disclosures- 5 steps: 1. System to identify and record related parties. 2. Identify ordinary citizen transactions . 3. System to identify and record RP transactions. 4. Assess materiality of captured RP transactions for disclosure. 5. Draft disclosure.

Related party disclosures – Suggested prep work:  Establish Policy framework.  Capture RP data early for draft disclosure. Check identified RP’s with AP / AR / payroll  systems for any transactions. Retain audit trail.  Management to apply judgement & materiality to determine disclosure. Retain audit trail.

Related party disclosures- audit expectations:  Auditors will review financial report disclosures and also Council’s internal systems and policies implemented by the management to ensure compliance with the requirements of AASB 124.  Expectation is to use shell accounts review process to present draft related party disclosures for audit clearance.

Performance statement audit – FY 17:  Food safety indicators to be reported on a calendar year basis from FY 17.  HACC indicators not to be reported from FY 17.  Councils to have internal periodic quality control check process over the data provided by various indicator owners.

Audit matters from FY17 interim phase  FY17 flood impact.  Performance statement – Need for internal QA.  Advantages of bringing forward PP&E valuation exercise early.  Federal budget announced that 6 months of FY18 financial assistance grants will be paid in FY17. Rev rec and budget variance considerations.

Audit need not be painful !!! – Top 2 tips  Communicate with auditors on key accounting/ audit matters well before year-end visit. Ensure no last minute surprises!  Make use of shell accounts review process to agree on key disclosures requirements (including AASB 124).

Changes at VAGO:  More client-focused approach with wider/deeper engagement.  New templates.  New address from 29 May 2017.